Evaluating Individual Trustees' Performance

By Barry S. Bader

As the drumbeat of attention to governance effectiveness intensifies, the evaluation of individual directors is off-limits no more.

Indeed, the New York Stock Exchange, Business Roundtable and National Association of Corporate Directors all recommend that corporate boards institute individual director assessment.

Medtronic, a manufacturer of medical devices with more than $10 billion in annual revenue, evaluates its board members on how well they represent shareholders’ interests, engage in meaningful participation, communicate freely with other directors, understand the company’s strategy and make their expertise available to the board.

The Governance Institute recommends that hospital and health system boards evaluate not only “the effectiveness and adequacy of the board and its committees” but also “the background and qualifications of individual directors, and the contributions of each director to the board and to mission effectiveness.”

Middlesex Health System, a single-hospital system in Middletown, Conn., has evaluated individual performance since the 1990s, says CEO Robert Kiely. “We felt that we were entering a new era in terms of expectations of board members,” he says. “Board members asked, ‘How can we expect our management staff to take their jobs seriously if we are not serious about making sure that the board is held to the highest standards possible?’”

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